EY CompStudy Technology 2013

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Abbreviated version

Transcript of EY CompStudy Technology 2013

  • Visit www.compstudy.com and register to receive full access

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    Abbreviated Edition

    A SERVICE FROMPARK SQUARE

    EXECUTIVE SEARCH

    technology 2013

    www.compstudy.com Copyright 1999-2013, Park Square Executive Search LLC. All Rights Reserved

    cs2013tech

    Sponsored By:

  • 2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology

    www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #

    TABLE OF CONTENTS

    Demographics 3

    Cash Compensation 4

    Equity and Severance 5

    CEO Compensation by Headcount 6

    Founder Compensation and Sponsor Information 7

    Founder Compensation and Sponsor Information

    7

    Sponsor Information

    Park Square Executive Search is a retainer-based executive search firm located in Cambridge, Massachusetts and in Menlo Park, California. Park Square serves clients and institutions that are changing the world through discovery, innovation, and growth.

    www.parksquare.com

    EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

    www.ey.com

    WilmerHale offers unparalleled legal representation across a comprehensive range of practice areas that are critical to the success of our clients. We practice at the very top of the legal profession and offer a cutting-edge blend of capabilities that enables us to handle deals and cases of any size and complexity.

    www.wilmerhale.com

    17 16.3

    USD 1,000s

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    240.6

    182.8191.3

    206.6

    34.5

    260

    164.7 164.7

    192.8174.6 180.8

    18.5

    152.3 148.7

    47.8

    64.826.3

    30.8

    199.5

    51.936.9

    19.5

    35.326

    72

    257.5

    28

    205.4

    83.8

    29.6

    19

    2419.3

    63.4

    57

    34.9

    87.5

    248.4

    2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus

    CEO Head ofFinance/CFO

    Head ofBus Dev/CBO

    Head ofClinical Research

    Head ofRegulatory Affairs

    Research &Develop/CSC

    Head ofPlatform Tech/CTO

    Head ofEngineering

    9.36

    Founder Total Cash

    Founder CEOs received a more substantial raise than their non-founder peers: 2.5% vs 0.8%.

    Founder Equity Holdings

    On the average, founders of technology companies hold significantly more equity than their life science peers largely due to the less capital-intensive nature of most technology start-ups.

    Founder Cash CompensationLetter to the Industry

    On behalf of Park Square Executive Search, EY, WilmerHale, and Professor Noam

    Wasserman of Harvard Business School, Id like to welcome you to the 2013 edition

    of our annual Compensation and Entrepreneurship Report in Technology. This

    reportour fourteenth annual and largest to dateincludes summaries and analysis

    of compensation data collected from executives at more than 550 private companies

    from across the country in software, hardware, content, clean tech and other

    industries. The survey data for this edition were collected between May and August

    of 2013.

    This survey responds to our clients continuing need for better access to reliable,

    comparable compensation data to assist them in the critical decisions involved in

    attracting, motivating and retaining key executives at private companies.

    We are able to present correlations between executive compensation and a number

    of variables, including: financing stage, company size both in terms of product stage

    and headcount, founder/non-founder status, industry segment and geography. We

    also provide a number of analytics on Board of Directors compensation and make-

    up, company equity plans, and a look at how organizations develop as they raise

    additional financing.

    This summary document provides only high level excerpts from the detailed analysis

    available on-line at www.compstudy.com. Complete access to the data is available

    free of charge to survey participants and is also available as a paid subscription.

    Thanks for reading,

    Aaron Lapat

    Managing Partner

    Park Square Executive Search

  • 2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology

    www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #

    Geography Financing Rounds Raised

    Business Segment Headcount by Number of Full-Time Employees

    28.2

    15.1

    12.2

    11.3

    7.6

    25.6

    % respondents in this range

    California

    New England

    Mid Atlantic

    Midwest

    West

    South

    9.2

    1.5 3

    3.9

    8

    14

    7.5

    52.9

    % respondents in this range

    Software

    Communications

    Hardware/Semi

    IT Services/Consulting

    Digital Media/Content/Information

    Clean Tech

    Healthcare IT

    Other

    0

    10

    20

    30

    40

    50

    44.9

    14.42218.8

    % respondents in this range

    120 2140 4175 76+

    0

    5

    10

    15

    20

    25

    17

    22.3

    16.311.6 11.8

    21

    % respondents in this range

    0 1 2 3 4 5 or more

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    14%

    % F

    ully

    Dilu

    ted

    Sha

    res

    50th25th Mean 75th

    5120 FTEs 6.2 10.4 11.6

    3.62140 FTEs 5 5.3 7.4

    3.741+ FTEs 5 5.3 6.2

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    1,00

    0s

    US

    D

    50th25th Mean 75th

    123.8120 FTEs 181.5 183.7 226.3

    2252140 FTEs 250 260.7 289

    24541+ FTEs 275 281.5 306 The geographic distribution in 2013 closely mirrors venture capital funding trends, and the universe of private companies at large.

    Screenshot of online reporting tool

    The companies in this years survey are at roughly the same stage as in last years survey, when measured by the number of financing rounds raised.

    Software companies continue to make up half of the population; Clean Tech has been the fastest-growing segment over the past three years.

    Respondent company headcounts were distributed similarly to those in the 2012 survey, with a slightly higher percentage of large companies this year.

    CEO Compensation by Headcount

    Equity: By Number of Full-time Employees

    Base Salary: By Number of Full-time Employees

    Demographics

    This survey of executive compensation in privately held technology companies was conducted between May and August of 2013. The questionnaire resulted in 550 companies participating with data from over 3,000 executives in a wide cross section of industry sectors, geographies and stages of development.

    When controlling for other variables, headcount has proven to be the best predictor of non-founder cash compensation. Equity holdings tend to be most strongly correlated with the number of financing rounds a company has raised.

    36

    Slice this data yourself at www.compstudy.com

  • 2013 Compensation & Entrepreneurship Report in Technology2013 Compensation & Entrepreneurship Report in Technology

    www.compstudy.com | www.parksquare.comwww.compstudy.com | www.parksquare.com# #

    Cash Compensation Equity and Severance

    17

    11.6 11.8

    USD 1,000s

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    $400

    250

    182189

    177185

    172179

    165 169 173178

    164174 176

    142 142 158161

    188 190

    5434

    31

    483935 43

    7

    8451

    33

    168

    5627

    26

    11581

    33

    48

    28195641

    166341

    1749

    2376

    83

    54

    131

    CEO COO Head ofFinance/CFO

    Head ofTech/CTO

    Head ofEngineering

    Head ofSales

    Head ofMarketing

    Head ofBus Dev/CBO

    Head ofHR

    Head ofProf Svcs

    GeneralCounsel

    259

    8

    2012 Base Salary 2012 Bonus Received 2012 Unachieved Bonus 2013 Base Salary 2013 Target Bonus

    17

    % equity owned, fully diluted

    0

    1

    2

    3

    4

    5

    6

    7

    8

    22.6

    0.9 1

    2.6

    1 1.2 1 1.2 0.6 0.8 0.71.1

    0.50.91.1

    5

    CEO COO Head ofFinance/CFO

    Head ofTech/CTO

    Head ofEngineering

    Head ofSales

    Head ofMarketing

    Head ofBus Dev/CBO

    Head ofHR

    Head ofProf Svcs

    GeneralCounsel

    6.2

    2013 Median 2013 Mean

    0.1 0.2 0.2 0.3

    This data compares 2013 compensation data with compensation data for 2012 non-founding executives. 2012 figures are represented with both actual bonus received and total unachieved target bonus for the year. 2013 bonus figures indicate at-plan target amounts. More granular analysis can be found online at www.compstudy.com.

    The CompStudy survey also contains detailed questions around non-cash executive compensation and benefits. The 2013 online reports show base, bonus, equity at hire, current equity, and severance for each executive role. More granular analysis can be found online at www.compstudy.com.

    These